Posted on 03/02/2020 6:01:00 AM PST by Enlightened1
Jack Welch, a railroad conductor’s son who became chairman and CEO of General Electric and led it for two decades, growing its market value from $12 billion to $410 billion, has died. He was 84.
His death was announced Monday by his wife, Suzy.
With a determination to win by busting up bureaucratic complacency, Welch earned two titles — “manager of the century,” and “Neutron Jack” for slashing tens of thousands of jobs. Under his leadership, GE became the world’s most valuable company, after Microsoft. Its fortunes later turned south.
While at the helm, Welch bought and sold scores of businesses, expanding the industrial giant into financial services and consulting. GE Capital Bank was founded seven years into his tenure. His acquisitions included RCA — then-owner of NBC — and Kidder Peabody, the brokerage that became entangled in an insider trading scandal.
He also streamlined the conglomerate’s bloated bureaucracy by giving managers free rein to make changes they deemed beneficial to the bottom line.
He invented the “vitality curve,” in which managers were ranked into three groups. The top 20% “A” group was “filled with passion, committed to making things happen.” The “vital” 70% “B” group was essential to the company and encouraged to join the A’s. Then there was the bottom 10% “C” group. “The underperformers generally had to go,” Welch said in his 2001 book, “Jack: Straight From the Gut.”
(Excerpt) Read more at cnbc.com ...
But the worst decision of his life was choose Jeff Immelt as his successor.
Should have gone with McNerney who successfully ran 3M and the Boeing pre the recent issues..
Jack’s biggest failure was named Jeff Immelt. RIP to an otherwise magnificent bastard of industry.
Yup. Augustine sold us down the river and made a bundle. Butt, that’s what they do. LOL! I started with Martin Marietta in 1975 and hung on through the merger all the way until 2011. Got laid off and retired the same day.
It wasn’t always fun working for GE under Jack but you knew you were good at your job because if you weren’t you were GONE. The one over one rankings and getting rid of the bottom 10% wasn’t just for managers. It applied to just about everyone including the scientists at the Research Center.
Great bottom line, terrible long term capability; he ate his young.
Good riddance.
One of those people who left the world, and everything they touched, in worse shape.
RIH.
100% agree... I worked under that system at Dow and at another company later. It's OK if you have a TON of people in your rating group... (like, 100 or more)… but, even then, 10% FORCED turnover is stupid, expensive, and counterproductive.
It's especially devastating when you try to apply it to a group as small as 20, or less... which, the brainiacs running Dow attempted to do.
I don’t mean to beat a dead horse — but, as you say, in a small group it is possible to have everyone working hard and making a serious contribution. And you STILL need to get rid of some of them. That does terrible things to morale. Even if they are very, very good, they can still be fired for not being good enough. That’s awful.
I have never seen employers as “paternalistic” entities that “owe” their workers anything. But this sort of policy is needlessly corrosive. Good people who are working hard shouldn’t be fired “just because”.
Jeff Immelt was Welches biggest mistake
Robert Nardelli Was Home Depot’s biggest mistake.
Talk to anyone who has tried to do business with GE.
They’ll pull out every accounting trick from the bottom of the playbook to spin your receivables out to Net 300.
I was involved in a joint venture with GE in the Welch era and one of the first things I learned from the GE managers was “there is always a bottom 10%”.
We bought his book and read it!
Jack once said something like ‘ “wouldn’t it be great to have a factory on a big boat, so you could just go to wherever costs were lowest?” He didn’t appreciate being quoted and said it was off the record, but everyone knew, that was classic Jack.
Right? Right?
Without a doubt
Without a doubt
Without a doubt
RIP.
Not if you're company that cares, even the slightest, about your people.
He took one of the best companies in the world and hollowed it out, by manipulating earnings *reports*.
He (along with McKinsey) started the offshoring craze.
He inflicted the six-sigma mythology / cult, the "Crossfit" of management.
He started the "cut the bottom 10%" craze turning employees against each other.
He was big on paying management with stock options starting the craze of screwing up the company beyond the point of repair just in time to goose the stock price right before the golden parachute.
He started the cult of the CEO as larger than life.
He lied through his foul subhuman teeth about "We didn't give them lifetime employement, we gave them lifetime employability" ...just like he divorced his wife to marry someone from Harvard Business Review.
After doing all this, he tried to get $2 million/year for LIFE in severance. No value added for that, he's gone.
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